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|In: Industry Commentary|Last Updated:

From Daniel Kahneman’s Thinking, Fast and Slow:

“The following is a personality sketch of Tom W, written during Tom’s senior year of high school by a psychologist, on the basis of psychological tests of uncertain validity:

“Tom W is of high intelligence, although lacking in true creativity. He has a need for order and clarity, and for neat and tidy systems in which every detail finds its appropriate place. His writing is rather dull and mechanical, occasionally enlivened by somewhat corny puns and flashes of imagination of the sci-fi type. He has a strong drive for competence. He seems to have little feel and little sympathy for other people, and does not enjoy interacting with others. Self-centered, he nonetheless has a deep moral sense.”

Rank the following programs in order of the likelihood Tom W is enrolled as a graduate student there:

  • Business administration
  • Computer science
  • Engineering
  • Humanities and education
  • Law
  • Medicine
  • Library science
  • Physical and life sciences
  • Social science and social work

Done? Now rank the same fields in order of popularity — in order, that is, of how many graduate students you’d expect to be enrolled in each of them.

If you’re like most people, your ranked computer science and engineering as Tom W’s most likely fields, even though you probably figured business administration and humanities and education are more popular overall.

It’s a beautiful example of just how easily we fool ourselves (me too when I went through the exercise). We know Tom W’s psychological profile is unreliable because this was explained to us before we read it. Even so, our reliance on stereotypes created a consistent narrative that overpowered our knowledge of basic statistics: If there are ten MBA enrollees for every grad student in computer science, the odds would be ten times higher that this is where we’d find Tom.

They’d still be higher even if Tom’s psychological profile was accurate. When choosing a graduate program, he, like everyone else, would take into account more than his stereotypical personality traits … his aptitudes, what he enjoys doing, and where he would expect the best career, for example.

I’ve spoken to quite a few groups by now on the importance of a culture of honest inquiry and the hazards of “intellectual relativism” and trusting your gut. My emphasis has been on factors that allow others to manipulate us, like:

  • Tribalism – our tendency to divide the world into “us” and “them,” which encourages us to discount and disparage anything “they” have to say.
  • Anger and fear, which make us stupid and gullible.
  • Hyperlinks (aka footnotes), which work like this: If I say, in KJR, that you should accept it because I say it’s true, you’ll likely be skeptical and evaluate it carefully. If, on the other hand, I say something is true and you should accept it because this other person, who’s an expert in the subject, says so (the hyperlink), you’ll be far more likely to accept it at face value, even though you have no more reason to accept my assertion that the other feller is an expert than you had to accept my original proposition.

In any event, having read it,  it’s clear there’s a lot more to creating a culture of honest inquiry than avoiding overt manipulation. Here’s another obstacle, which you can demonstrate at your next all-hands meeting.

Divide the participants into two groups. Set up a flip chart for each of them, so neither group can see what the other is looking at. On the first group’s flip chart, write “25,000” in the middle of the page. On the second group’s chart, write “125,000.”

Give everyone a piece of paper and tell them to first write “yes” if they think the average salary in your department is higher than the number on the chart, “no” if they think it’s lower. Then tell them to write their best guess as to the actual average salary, without comparing notes.

Assuming you have enough employees in each group to provide a reasonable statistical sample, it’s just about certain that the first group’s average estimate will be much lower than what the second group came up with. The effect is called “priming” and it’s remarkably difficult to overcome.

There’s an irony here: Many KJR subscribers will take my word for what Thinking, Fast and Slow has to say, instead of verifying it for themselves. It’s footnoting in action.

None of us has much choice. We’re all too busy to read everything we should, and so we rely on others to summarize for us. That’s okay.

Just make sure those you rely on are reliable, and not someone you trust because they’re a member of the right tribe.

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|In: Business Ethics|Last Updated:

Al Gore was right.

Oh, don’t be like that. When a man is right, he’s right whether you like him, hate him, or feel intense apathy about him. A couple of years ago Gore published The Assault on Reason, and every day brings another example of People We’re Supposed to Take Seriously swinging another baseball bat at Reason’s head.

Take, for example, Jonah Lehrer’s “Trials and Errors: Why Science Is Failing Us,” in the January 2012 edition of Wired. Lehrer strings together some high profile examples of scientific theories turning out to be wrong, adds erudite-sounding invocations of philosophers like David Hume, and concludes that all scientific accounts of causation are just empty story-telling.

As an antidote, read the Wikipedia entry on Karl Popper. He’s the father of modern scientific epistemology, but somehow didn’t rate even a mention in Lehrer’s article. What you’ll learn is that in our search for truth, the best we’re able to manage is a collection of ideas nobody has managed to prove false.

That’s what science is — causal “stories” (they’re called theories). Some are new and have been subjected to just a few challenges. Others have been battle-tested over a span of decades or even centuries by large numbers of researchers, some brighter than anyone reading these words (not to mention the person writing them); a few brighter than everyone reading these words put together.

Fail to prove an idea wrong enough different times in enough different ways (fail to falsify it in Popper’s terminology) and scientists start to feel confident they’re on the right track.

Not certain, but confident, because it isn’t a certain process. Even when scientists get something right, “right” can turn out to be a special case of a theory that covers more ground. That’s how it turned out for Newton’s theory of gravity. It’s useful enough when you need to build, say, a building that doesn’t fall down, but not sufficient for something more complicated, like, say, a global positioning system.

Citing science’s limitations is easy, which has led the easily fooled to the foolish conclusion that we should ignore what the scientific method tells us — foolish because no one has offered an alternative that works anywhere near as well, let alone better.

It’s New Year’s Resolutions time and I have one for you. (Yes, I have some for myself too, but suggesting ways for other people to improve themselves is so much more fun …) It’s to foster a culture of honest inquiry … in the business culture you influence (KJR’s proper scope) and also in your social circles and family, if that isn’t too much to ask.

It’s harder than you might think, for two interconnected reasons: (1) All culture change starts with changes to your own behavior; and (2) we’re all wired to reach the wrong conclusion under a scarily wide variety of circumstances. For example:

Did you know that in the United States, the highest incidences of kidney cancer are found in small towns?

It’s true. What conclusion do you draw from this? Probably not that it has to be this way as a matter of pure, random chance, but that’s the actual explanation. Don’t believe me? Here’s another, equally true statement: The lowest incidences of kidney cancer are found in small towns.

The way randomness works is that small samples exhibit more variation than large samples. So large metropolitan areas … big samples of the U.S. population … will all have incidences of kidney cancer very close to the overall national mean. Small towns, each a small sample, will vary more widely, so some will have an incidence much lower than the national mean while others will have an incidence much higher.

Even professional statisticians get this sort of thing wrong if they aren’t on their guard for it, as is documented, along with about a zillion other places our ability to draw the correct conclusion falls by the wayside, by your must-read book for 2012 — Daniel Kahneman’s Thinking, Fast and Slow.

The title comes from the author’s well-tested and thus-far not falsified theory that humans rely on two separate decision-making systems. One is quick, heuristic, error-prone, and so effortless we’re often unaware it’s even operating. The other is slow, requires significant effort and concentration, and takes proper stock of evidence and logic.

Do you want to encourage a culture of honest inquiry? It means engaging the slow, effortful system as much as you can. That requires an environment that provides enough time, and sufficiently few distractions, to allow it.

It will be an uphill battle, but one eminently worth fighting.

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